A HAUL of $2.5 trillion dollars
worth of United States Federal Reserve notes, dated 1934, bearing the signature
of Franklin Delano Roosevelt, packed in sealed tins, some said to be protected
by canisters of poisonous gas, does require explanation.

The prosecution alleged a naive scam, and the jury at
Snaresbrook Crown Court in London this week believed them.

Michael Slamaj, 56, a Yugoslav-born businessman from
Canada, and Graham Halksworth, 69, a retired forensic scientist who once
worked for Scotland Yard, were found guilty of conspiracy to defraud. Slamaj
was also convicted of possessing fake bonds.

The scheme was detected when two men tried to cash £15.5
million of the notes at a Canadian bank. It was noticed that the word "dollar"
was printed on the bonds instead of "dollars".

Slamaj was arrested after he asked a solicitor to help
him sell £31 million of the bonds. Police later recovered documents
with a face value of £93 billion from his safety deposit boxes.

But his defence team offered an alternative explanation
for his possession of the bonds, one that just might be true and that delves
deep into the murky history of the CIAís post-war crusade to destabilise
communism.

Slamaj claimed the vast haul was recovered from the wreckage
of a B29 bomber that crashed on the Filipino island of Mindanao in 1948.

Professor Richard Aldrich, of Nottingham University and
the co-editor of the journal Intelligence and National Security, was hired
to investigate the claim - and his findings suggest it is plausible enough
for Slamaj to have believed it in good faith.

As Chairman Maoís forces advanced through China
in 1948, says Prof Aldrich, Britain and the US dreaded the prospect that
one of the worldís largest stocks of gold - worth $83 billion at
current prices - would fall into communist hands. So it was decided to
extract the gold reserves from China before the communists could seize
them.

The CIA provided the means for this bullion-rescue mission.
Flying in B29 bombers decked out in the livery of its proprietary civilian
airline, Civil Air Transport (CAT), it flew numerous missions to move huge
shipments of gold from mainland China.

Where might Federal Reserve notes have fitted into the
operation? Prof Aldrich explains that they may have been used "for
persuading managers of major banks in the interior of China to part with
their vast stocks of gold".

Printing Federal Reserve notes to a value much greater
than that of the gold they were intended to replace could have been an
operational necessity. The US almost certainly had no intention of honouring
them anyway.

In fact, suggests Prof Aldrich, the monetary instruments
obtained by Slamaj may be intricate forgeries, but if they are, it is possible
that the CIA manufactured them.

The story starts during the Second World War, when the
counterfeiting of currency became a major area of covert actions by Britainís
Special Operations Executive (SOE).

The US was not slow to learn SOEís lesson. After
1945, economic warfare against communist states became a central instrument
of Cold War policy.

Activity against China was on the grand scale and the
regional centre for US covert operations in Asia was the Philippines. The
CIA maintained sophisticated printing presses in Manila for the purpose.
Its main base for secret air force operations was close by.

In his submission to the trial Prof ldrich suggested
that if the notes are forgeries, they "were most likely manufactured
at the CIAís ëregional service centreí [RSC]" -
located along Roxas Boulevard, in Manila, at the seafront compound about
a mile from the US Embassy.

He also found evidence to support Slamajís defence
in the files of the Foreign Office. He wrote: "Foreign Office files
also show that the CIA was involved in other currency issues, including
the movement of printing plates for Chinese currency."

He said: "I note that the chronology of this operation
fits very closely with that set out by the defendants."

Would the CIA really have printed such a vast quantity
of these bonds and risked flying them into occupied China on vulnerable
aircraft? Prof Aldrich says: "Because of the possibility of operational
loss, surplus amounts of FRNs [Federal Reserve notes] were required.

"Regional banks receiving FRNs in return for their
gold were aware that the FRNs were likely to be redeemable for only a proportion
of their face value. Therefore a much larger value in FRNs would have been
required than the total value of the gold that the Americans and Chinese
nationalists were trying to extract from China."

Slamaj is preparing to appeal. He remains adamant that
he truly believed the notes were authentic. If that is the case, Prof Aldrich
suspects the CIA expected them to disappear into civil-war China and that
their re-emergence has threatened to lift the lid on still classified aspects
of economic warfare.

He says: "I cannot prove these FRNs were part of
the operation to extract gold from China. But there is absolutely no doubt
that such an operation took place.

A problem that has been most prevalent in the Far East
recently surfaced in London when officers from the City of London Fraud
Squad seized fake $US Treasury Bonds with a nominal value in excess of
$2.5 trillion.

On the first occasion $2.5 trillion worth of these bonds
was seized from a safe keeping vault of a bank in the City of London in
an assortment of 44 boxes, files and envelopes. Among the haul were a number
of counterfeit Chinese Railway Bonds dating from the early part of the
1900s.

Although genuine Chinese Bonds have a collector's value
of about £20 each, the faked US Treasury Bonds are well known to
the US Secret Service and other law enforcement agencies, in Hong Kong,
Singapore, the Philippines, and Canada. Attempts have been made by fraudsters
to use them as collateral for loans or to obtain money from naive investors.

On the second occasion a number of people were arrested
in the City of London after presenting billions of dollars worth of these
bonds to a financial institution attempting to obtain 'facilities'. Two
women have been charged.

The story usually given by the fraudsters is that these
bonds were printed by the CIA and given to Chiang Kai Sheck who opposed
Chinese Communism in the 1930s. However, so the story goes, some were lost
and were then found in caves/crashed aircraft/sunken submarines (take your
pick) by illiterate natives who passed them on to city slickers in exchange
for a few trinkets. The fraudsters have even attached details of a B17
bomber, its tail number and details of the crew which perished in a crash
in the rain forests of some distant tropical island.

Investors in the Far East have parted with huge sums
of money to buy these bonds at 1¢ on the dollar. In June 2001, a US
resident shot his wife and two children then turned the gun on himself
after finding that these bonds, which he tried to cash at the US Bureau
of Public Debt, were complete fakes.

Invariably, the bonds are contained in what looks like
a metal box with a serial number and a key number. The seal of the United
States is usually embossed on to box lid. Once opened, the box will contain
the bonds (which have a peculiar creosote aroma), sometimes large and heavy
yellow metal coins in denominations of anything from $100m - $1bn, a negative
film roll and a supporting documents such as an international certificate
of immunity.

Although the Treasury Bonds are well presented, the fraudsters
did not realise that the various Federal Reserve Banks have codes attached
to them as follows:-

Some of the treasury notes have the incorrect seal code
for the Federal Reserve Bank purporting to have issued the note. How did
this happen? Quite simply, the fraudsters cut and pasted images of current
$US currency into the bonds and they didn't look too closely or they didn't
understand what the codes meant. On occasion, if you know where to look,
you can see the remnants of the currency that they have tried to hide or
cut in the process.

If you are presented with documents of this nature, the
US Secret Service at the US Embassy would be delighted to hear about it
and will assist in any way that they can.

For other examples of this high profile crime please
see the following web pages:-

http://web.singnet.com.sg/~twells/news110.htm

http://www.uk-fraud.info/al_bond.htm#top

Revised: 17 June 2002

Note - In spite of the above dismissals, there is actually
circumstantial evidence to suggest the basic premise of this story just
have some truth to it: that a HUGE dollar amount of legal and legitimate
special issue, extremely large denomination US Treasury notes were created
and ended up in the Phillipines just before WWII.

It is further conjectured that one or more of the transport
planes carrying the sealed boxes containing the Treasury notes DID crash...and
that a good portion of the notes either washed up on shore in their boxes,
or were found at an inland crash site, and then made their way to a number
of different people...mostly powerful Phillipinos. Remember the Marcos
fortune? It was reputedly a lot bigger than the media knew and Imelda
is pressing in court to this day to try to recover at least some of it.

There have, over the years, been a number of attempts
by various individuals and groups to redeem some of these Treasury notes
(real or hoaxed)...with alleged values of $20 million to $100 million dollars
US...for cash at banks and other financial institutions around the world.

As far as is known, all efforts to collect have failed...the
banks and institutions have been told, it is suggested, that under NO circumstances
are they to cash the notes. As one might imagine, the US Treasury is more
than a little concerned about the potential of a couple trillion in legitimate
Treasury notes floating around or getting into the hands of adversaries.

We have received reports that the Treasury has conducted
secret talks with a few of the note holders and has made offers to redeem
them for a small percentage (1-10%) of their face value. The Treasury
clearly wants these notes turned in and removed from 'circulation'...but
will not pay full face value for obvious reasons.

If anyone has anything further - of substance - on this
story, please let us know. --ed